Sweet on snacking: Mondelēz full year results boosted by “resilient categories” of indulgent treats

01 Feb 2023 --- Mondelēz International has released its full-year 2022 results, showing growth in volume and revenue across markets. The company focused on its chocolate and biscuit brands as the resilience of snacking outgrew inflation troubles.

“We made significant progress against our strategy of accelerating growth and focusing our portfolio in the attractive, resilient categories of chocolate, biscuits and baked snacks, while continuing to invest in our brands and capabilities,” says Dirk Van de Put, CEO of Mondelēz International.

“We also continued to deliver strong marketplace execution amid challenging operating conditions and continued macroeconomic volatility,” he adds.

The confectionery giant has particularly benefited from a strong performance in emerging markets, where volume growth where revenue is up 22% year-on-year – compared to 7% for developed markets – reaching a 12.3% overall growth.

The company has announced an agreement with Perfetti Van Melle to sell its developed markets gum business in the US, Canada and Europe. The deal is expected to close in the last quarter of 2023.

Mondelēz began reviewing its gum business in 2021 after the demand for the segment’s brands took a severe hit during COVID-19 lockdowns.

Following a strategic review, Mondelēz ditched its Trident, Dentyne and Halls gum and cough drop brands, aiming to generate 90% of the revenue in its chocolate and biscuits businesses.

Snacking giant’s strategic moves
The company’s year has been marked by strategic disinvestments – in the mentioned gum business – and by a series of acquisitions.

The confectionery giant has particularly benefited from a strong performance in emerging markets.Mondelēz acquired Grupo Bimbo’s confectionery business, located primarily in Mexico, for US$1.3 billion to build in the fast-growing snacking segment in emerging markets. The deal was closed in November. 

Bimbo’s brands Ricolino, Vero, La Corona and Coronado are leaders in lollipops, marshmallows, chocolates, gummies and other confectionery products.

The company also expanded its refrigerated snacking and performance nutrition bar range by purchasing Clif Bar for US$2.9 billion. The deal closed last August and added brands Clif, Luna and Clif Kid to the business portfolio.

In January 2022, Mondelēz closed on its acquisition of Chipita, a prominent player in the Central and Eastern European snack-size cakes and pastries category.

Emerging markets shine
The business showed particular strength in the Latin America market with an increase in revenues of 29.7%, booming to 43.2% growth year-over-year for Q4 in the region. Growth was driven by price action, raising prices by 23.7%, together with an increase of the volume of products sold of 8.2%.

In Asia, Middle East and Africa region volume growth was similar, at 7.4%, with revenue increasing by 12%. In comparison, sales in North America and Europe were fully driven by price changes as volume sold was untouched from a year earlier – revenue increased 11.5% in North America and 7.4% in Europe.

“Our 2022 results demonstrate the strength and diversification of our portfolio as we delivered broad-based growth in terms of regions, categories, and brands. We delivered strong gross profit dollar growth, driven by double-digit top-line growth supported by both pricing and volume, enabling robust cash flow generation and significant return of capital to shareholders,” Van den Put notes.

For 2023, the company expects revenue growth of 5-7%.

By Marc Cervera